The Bank of Greece submitted its Monetary Policy Report 2025-2026 to the Speaker of the Greek Parliament and the Cabinet, outlining an economy that is still expanding faster than the euro area but is facing renewed inflation pressure and higher external risk. The report says the shock from Middle East tensions and disrupted energy flows has interrupted disinflation, while global trade frictions and geopolitical uncertainty are weighing on growth. Against that backdrop, the central bank projects Greek real GDP growth of 1.9% in both 2026 and 2027 and 2.0% in 2028, while Harmonised Index of Consumer Prices inflation is expected to rise to 3.8% in 2026 from 2.9% in 2025 before easing to 2.6% in 2027 and 2.3% in 2028. The report points to solid near-term domestic performance alongside a worsening external environment. Greek GDP grew 2.0% year on year and 0.2% quarter on quarter in the first quarter of 2026, compared with a 0.2% quarter-on-quarter contraction in the euro area, while Greek HICP inflation accelerated to 4.9% in May from 3.1% in February, above the euro area rate of 3.2%. It also highlights strong public finances, with a general government surplus of 1.7% of GDP in 2025 and a primary surplus of 4.9%, and further debt reduction, with the public debt-to-GDP ratio falling to 146.1% from 154.2% in 2024. Financial conditions have tightened globally, but Greek bond and equity markets remained resilient, banks maintained solid profitability, capital and liquidity, and lending to non-financial corporations still grew 9.5% year on year in April 2026. On policy, the Bank of Greece calls for a prudent fiscal stance that does not add to inflationary pressures, with any support measures kept targeted, temporary and fiscally sustainable. It also argues for structural reforms and investment to raise productivity, improve competition, strengthen innovation and access to finance, accelerate the energy transition, address labour market and housing constraints, and preserve sustained primary surpluses and a continued decline in the debt ratio.
Bank of Greece2026-06-23
Bank of Greece submits monetary policy report, projects 1.9% growth in 2026 and inflation at 3.8%
The Bank of Greece's Monetary Policy Report 2025-2026 says Greece should keep growing faster than the euro area, but higher energy prices and geopolitical tensions have pushed inflation back up. It projects real GDP growth of 1.9% in 2026 and inflation of 3.8%, while highlighting strong fiscal results, resilient markets and solid bank performance. The report calls for prudent fiscal policy and continued structural reforms to contain inflation and support longer-term growth.